The “Tech Tax” Will Not Solve San Francisco’s Housing Problems

Posted on July 06, 2016

By Scott Wiener

Several of my colleagues are proposing a “tech tax” for the November ballot — a tax of 1.5% of payroll targeting technology companies only. I share my colleagues’ extreme frustration about the explosive cost of housing in our city and the unacceptable and inhumane homeless situation on our streets. Yet, I don’t believe it’s a good idea to single out one industry with a tax designed to reduce employment — an industry that is producing good-paying jobs with good benefits and paying significant taxes to the city already. This tech tax just isn’t the right approach to a very real problem.

The technology sector did not cause our housing crisis. We have a housing crisis because our population began to grow in the 1980s, and we failed to produce enough housing over a period of decades to absorb that growth. Instead, we have seen increasing housing costs as San Francisco’s population has grown (by 200,000 growth since 1980) and as it continues to grow by 10,000 people a year. At some point, when you’re not producing enough housing, you hit a tipping point — which we did — and you have a crisis on your hands. We are now finally *starting* to produce more housing, and we’re seeing the beginning of a cooling. We have a lot more work to do, and we need to keep up the momentum with smart and forward-looking housing policy.

My concern is that this tax exclusively on technology sector jobs will do two things. First, it will continue to feed into the inaccurate perception that tech is entirely responsible for our problems and if we just “hold tech accountable” we will solve our problems. That is not the case. *We* have to solve our problems around housing, transportation, homelessness, etc. All business sectors are responsible for working as part of our community so that we address these problems as one city. One industry cannot even come close to solving our problems for us, nor should we try to impose that obligation on one sector. Most of the job growth in San Francisco has not even been in technology. We’ve seen significant job growth in other sectors as well, including healthcare, biotechnology, finance, and construction.

Second, what this tax will do is send a clear message that San Francisco is not open for business — that if you want to grow a company, hire people into good-paying jobs, generate tax revenue, support small businesses, etc., San Francisco isn’t the place to do it. I’m all for smart tax policy, and I’m certainly not allergic to well-thought-out tax proposals. I’ve even authored my fair share of tax measures. Yet, this measure would simply reduce the number of technology jobs in our city and signal that San Francisco wants to go back to the days when we’d lost our headquarters companies and were becoming hollowed out economically.

Let’s address the root causes of our housing and homeless crises, rather than targeting and blaming one industry that is contributing significantly to our economy and that is not the cause of these severe problems.